Sacramento County Employees’ Retirement (SCERS) has increased its allocation to US apartment assets through $80m (€73.4m) worth of commitments to funds managed by FPA Multifamily.
The pension fund disclosed in a meeting document that it has placed $50m into FPA Core Plus Fund VI and made a $30m commitment to FPA Apartment Opportunity Fund IX, creating a new manager relationship with FPA Multifamily.
According to SCERS, Fund VI is seeking a total capital raise of $1.25bn. The fund will pursue investments in core-plus apartments with a net return target of 9% to 11%.
Fund IX, which is seeking to raise $1.5bn, expects to acquire Class B apartments that are either under capitalised or need additional upgrades.
As of the end of 2024, SCERS had around 20% of its real estate portfolio invested in apartments, compared to around 30% in the NFI-ODCE Index.
The pension fund’s real estate allocation target has been lowered from 9% to 8%, with the current portfolio representing 6.2% of total assets.
In the board meeting document, the pension fund said that the new 8% allocation target is a more prudent target, adding that there are numerous opportunities for the new allocation.
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